There is no resistance to neo-liberalism in Argentina. The left has no impact. There are a few strikes, but they do not raise any challenges to the system.

An intervention from the floor by an Argentinian left winger at a Globalisation
and Resistance conference in London, February 2001.

The television transmitted images of hundreds of demonstrators, mainly women and children, at a supermarket, screaming loudly, ‘We want to eat! We want to eat!’ ... During the day hundreds of supermarkets in the whole country were plundered.

The government and media began to speak of ‘prevailing anarchy’ and of the necessity ‘to re-establish order’. President de la Rua informed the population on TV that Wednesday that he had declared a state of siege. People’s rights were suspended, any public meeting of more than two people was considered subversive, the mass media could be censored, the repressive machine was free to act and arrest people.

As soon as he finished the speech some people began to hit saucepans in their houses. This form of protest (cacerolazo) was common at the end of the military dictatorship. Then it extended to the streets to become an organised action. In one hour a million people challenged the state of siege.

By midnight the Plaza de Mayo square was full, and thousands had substituted the desperate scream of ‘We want to eat!’ for one more offensive, ‘Que se vayan’ (’Get them out!’). They didn’t only refer to the government, but to the entire political establishment ... They began to chant slogans dedicated to each of the main figures of the traditional parties, and even to some union leaders linked to these parties.

The police attacked them with horses, sticks, shields, tear gas and rubber bullets. The population’s peaceful protest became a true battlefield. Many of those who gathered in Plaza de Mayo had never participated in a street protest. There were many children and old men.

Initially it was easy for the police to corner and frighten the demonstrators. Then the resistance began to be organised. The square was filled with people and so were the steps outside the parliament building. A few hours after the beginning of the protests people knew the finance minister Cavallo had resigned.

Then on the Thursday everything began again. By midday people came to the square that had become the battlefield between the people and the government.

There were workers on high and low wages, university students in shorts with their T-shirts covering their faces, old ladies with their handbags, street children, office and bank clerks with their shirts and ties, sanitation workers in their uniforms, many indigenous peoples, women with children – all on the same side of the barricades.

The repression increased. The police began shooting lead bullets and many people were killed or wounded. The demonstrators answered by attacking McDonald’s, the banks, and other symbols of capitalism and the population’s poverty. They set on fire several buildings and vehicles. The battle extended to the whole city.

At noon the president gave up his post. The government collapsed.

Javier Carles, account of events of 19-20 December 2001 in Buenos Aires.

When I saw columns coming from all the neighbourhoods of the city after the president announced the state of siege I thought, ‘This is like the fall of the wall. This is the fall of the neo-liberal wall.’

Protester Ricardo Carcova, 20 December 2001.

The social and political crisis in Argentina took the US authorities by surprise. They expected a slow, politically controlled unravelling of debt default. No one had thought seriously of the possibility of political and social chaos.

A week after the expected default things do not seem so easy. The US fears the destabilisation can spread to other countries ... A veteran American diplomat with experience in the region, comments, ‘The Bush administration did not get involved in this crisis because it saw no domestic political benefit in doing so.’ Perhaps things will change if it suddenly finds itself facing a political and social crisis spreading across the hemisphere, because then its political opponents will be able to ask, ‘Who lost South America?’

Carlos Escude in the Buenos Aires paper La Nacíon, 3 January, 2002.

The explosion of anger that erupted onto the streets of Buenos Aires on 19-20 December 2001 did more than pull down a government. It also showed how economic crisis can suddenly create potentially revolutionary situations. In the aftermath, the presidency passed through four different hands until it came to rest in those of Duhalde, vice-president in the late 1980s and afterwards governor of Buenos Aires. The turmoil in the streets shows no signs of diminishing as I write six weeks later. There are reports of cacerolazo protests in Buenos Aires itself and similar protests in scores of provincial towns. Following the accounts on, for instance, the website of the Azul television channel is rather like reading descriptions of Germany in 1923, the year of an aborted revolutionary rising and the failed Nazi beerhall putsch. In place after place unemployed pickets have been blocking roads, hungry people have been invading supermarkets to demand food, and people whose bank accounts have been frozen have been attacking banks. The leader of the governing party in the Senate has talked openly of the possibility of ‘civil war’. The government has suspended repayment of its foreign debts, launched vitriolic denunciations of the owners of privatised concerns, and even sent police to inspect the books of foreign-owned banks. Yet at the same time it is trying to reassure the IMF that it will come to some arrangement to restore capitalist normality and is reassuring foreign-owned banks that it is not out to harm them.

Few observers believe that the government can assuage the discontent that is raging within the middle class and the working class alike, or that it can satisfy the demands of international capitalism. Like any government in the midst of near-revolutionary upheaval, it is pulled in one direction, then in the other and back again, unable to maintain any continuity of policy, unable to think about much except its own survival.

It is still too early to see clearly how things are going to develop. Some commentators have spoken of the ‘collapse of the state’. That is an overstatement. The state’s bodies of armed men were able to kill at least 24 protesters in Buenos Aires on 20 December, and another 20 in other towns. They have continued to attack protests since, especially in the provinces. But that there has been an enormous weakening of the authority of the state there can be no doubt. And the armed forces, so often in the past the arbiters of the country’s politics, have to date been unwilling to intervene. One officer told reporters, ‘Even if the situation turns to anarchy or to civil war, if they ask me to intervene my principal concern will be making sure my orders will be obeyed by my men’. [1]

Such a condition of instability cannot last forever. The disparate elements within the Argentinian ruling class are trying desperately to work out some common strategy for regaining control of events and bringing to an end the insurgency in the streets. If they are successful, there is no doubt that they will then use all the forces of the state to reimpose their version of ‘order’ and wreak vengeance on those who have challenged their power. But they are still a long way from being able to do this. Meanwhile, the Argentinian upheaval has enormous significance for the global system and for the opposition to it that has emerged worldwide in the two and a half years since the Seattle anti-capitalist demonstration.

Argentinian precedents

As in any great popular rebellion, people in Argentina have been reaching back in their collective memories for precedents. Three times in the 20th century huge upsurges from below have led to clashes with the state, resulting in outcomes that had a profound effect on social development for years afterwards.

The first such great clash was in January 1919 – that year of worldwide revolutionary upheaval. The Semana Trágica (Tragic Week) saw bloody battles between workers and the forces of the state in Buenos Aires. The police launched a fierce attack on the Vasena metallurgical plant workers, who had been on strike for several days. Some 200,000 workers, led by anarchist union leaders, marched on the plant. A fierce gun battle broke out, but the police were overwhelmed by the workers. The government then ordered the army to march on the city, and other, syndicalist-led, unions responded by calling a general strike, which was highly effective at first. But eventually the sheer level of repression began to have an effect. Individual unions broke ranks as groups of right wing civilians joined with the police and the army in launching attacks against the working class districts, raiding union buildings and murdering workers. According to the socialist press the final toll was 700 dead and 4,000 injured. The following year the military broke syndicalist-led strikes of farm workers in Patagonia, executing 1,500 strikers.

The outcome of these struggles was decisive in influencing the pattern of Argentinian politics over the next two decades: ‘There was a general weakening of the unions in the 1920s, while the role of the army as a key arbiter in national politics was enhanced’. [2] It was able, after a coup in 1930, to bring in a ‘decade of infamy’, during which conservative governments ruled the country through electoral fraud, corruption and the virtual exclusion of the workers from political life. [3]

The next great confrontation was that of 17 October 1945, ‘an event which has passed into the mythology of the Argentinian labour movement. On that day the working class entered the political scene in a massive and explosive manner’. [4]

In 1943 a group of nationalist minded officers had seized power. They did so at a time when economic expansion was leading to a renewed spread of working class militancy and one of them, Juan Peron, took it on himself to try to control this. He did so by insisting employers concede to certain of the demands of workers. This enabled leaders who backed his political ambitions to win the support they needed to dominate the major unions, which grew rapidly in size and influence. By 1945 major sections of the ruling class felt he had gone too far. They persuaded his fellow officers to remove him from the government.

Workers saw this attack on a colonel who had made concessions to them as a threat to their living standards and their dignity. As a wave of strikes spread across the country, the CGT union federation called for a general strike. Huge columns of workers marched on the Plaza de Mayo in the centre of Buenos Aires, frightening the military and forcing them to reinstate Peron. The momentum of the victory on the streets ensured that he won a clear majority in presidential elections the following year and ruled the country until 1955.

The workers’ victory was double edged. It created circumstances which forced employers to increase real wages by more than 30 percent over the next four years. The union leaders exercised significant influence in the Justicialist Party set up by Peron. His government introduced a version of the welfare state, with union recognition, paid holidays, compensation for redundancy and welfare benefits. But the form the victory took also tied workers and the labour movement to the Peronist myth, with a cult following for his wife ‘Evita’ – and to a nationalism which preached the unity of ‘patriotic’ employers and workers, holding that ‘international capitalism is an instrument of exploitation, national capital an instrument of welfare’. [5]

The third great upsurge was the Cordobazo of 1969 – the Argentinian equivalent of the French May and the Italian ‘Hot Autumn’. It took place against the background of two decades of attacks on real wages and working conditions.

A decline in real wages had begun under Peron, but the unions were still too strong for the liking of Argentinian capitalism. In 1955 the military overthrew Peron. There was not the immediate, co-ordinated workers’ revolt of ten years earlier. But massive repression was needed to beat back widespread resistance, with pitched street battles, a two-day general strike and armed sabotage. In the following decade Argentinian capitalism seized every opportunity to victimise militants, impose speed-ups, ‘rationalise’ industry and cut back real wages. Every success of workers in resisting attacks on their living standards was followed by escalating inflation, enabling the employers to restore their profits, and then recessions that sapped the will of workers to fight back in the face of state repression. By 1960 real wages in Buenos Aires were back to their level of 1947, [6] and by 1965 the workers’ share of national output had fallen from 49.9 percent to 40. [7] percent.7 This was the other side of the ‘developmentist’ strategy of a ruling class which wanted the profits to enable it to build up heavy industries capable of competing on world markets.

Such attacks created deepening bitterness within the working class. It found expression in enormous loyalty to the Peronist trade union bureaucracy and in a political identification with the exiled Peron so great that he would have won any genuinely open and free election. This caused the military intervention against civilian governments in 1962 and 1966 followed by the military dictatorship of General Onganía. The dictatorship froze wages, smashed strikes and took over unions that put up resistance. It also banned all political parties, including those of the bourgeoisie, and tried to impose military control at every level of society – for instance, taking control of the universities.

The armed forces killed two students during demonstrations against meal prices in May 1969. Protest demonstrations and local strikes erupted and the union federations called a national general strike for 30 May. [8]

Córdoba was the centre of a motor industry that had only emerged in the previous 20 years. Pay was better than in many other industries, and some saw its workers as ‘labour aristocrats’. But the newness of the industry and the relative youth of its workforce meant they were less weighed down by the experience of previous defeats and less subordinate to the national union bureaucracies. The car and power plants decided to supplement the general strike with an ‘active strike’ on 29 May. Columns of workers – some armed with Molotov cocktails – marched on the city centre, the location of the police HQ, the hotels and the banks. There were ‘4,000 IKA-Renault workers, 10,000 metallurgical workers, 1,000 power workers, and so on’. [9] The workers eventually put to flight 4,000 police and took control of the city centre. Some 5,000 fully armed soldiers then joined battle, forcing the workers to retreat to the working class and student districts, where they threw up barricades. The repression that followed killed 16 people, but did not stop the uprising exposing the vulnerability of the military government and the power of mass mobilisations. It opened up a three-year period of massive strikes, factory occupations, the holding of managers as hostages, violent demonstrations, guerrilla attacks on the forces of the state, and another violent rising in Córdoba, the Viborazo. [10]

This wave of struggles did not finally subside until after the military, on behalf of the ruling class as a whole, had permitted the return of Peron to the country. He assumed the presidency in October 1973. The governments run by him and, after his death in June 1974, his third wife Isabel, played very much the same role as that of the governments which oversaw the ‘Social Contract’ in Britain, the ‘Pact of Moncloa’ in Spain and the ‘historic compromise’ in Italy. The Perons were able to use their influence over the trade union bureaucracies to regain a degree of control over working class militancy through a Pacto Social, while the bourgeoisie and its state regrouped their forces. But the regrouping took a much bloodier form in Argentina than in Western Europe. Far right groups began to be given a free hand to physically liquidate their opponents. On the very day of Peron’s return to the country right wing paramilitaries attacked left wingers among the crowd of 2 million that greeted him at the airport, killing a large number. During the three years of Peronist government scores of left wingers and rank and file union activists were murdered, while the union leaders collaborated with the government. Then in 1976 the military overthrew Isabel Peron and launched the bloodiest assault any working class movement anywhere in the world had suffered since the Second World War, murdering 30,000 left wingers and rank and file activists.

The character of the struggle in Argentina

The three great popular eruptions of the 20th century had one central thing in common. They were clashes between the industrial working class on the one hand and the bourgeoisie and its state on the other. They were class confrontations that grew out of the internal dynamics of the development of Argentinian capitalism, not from some other mode of production or some extraneous factor. This is important, because the language used to describe Argentina often conceals this reality – and conceals the roots of the eruption on 19-20 December.

Argentina is usually categorised by mainstream economists as an ‘emerging market’ or a ‘developing economy’. The implication is that it is moving from being a poor agricultural country towards being an advanced industrial country, and any problems it faces are because it is not moving fast enough. Some on the left use their own version of the same idea, speaking of a ‘dependent’ economy, a ‘Third World country’ or ‘a semi-colony’. [11]

There is acute poverty in the country today, and it has long existed in the vast but sparsely populated rural areas and in the shanty towns around cities like Buenos Aires and Córdoba. But this is not because Argentina was historically a ‘poor agricultural’ country of the ‘Third World’. A century ago it was a country with an economy very similar to that of Australia, Canada or New Zealand, devoted to the export of highly profitable products of large scale capitalist agriculture (meat, wool, grain) to Western Europe and was widely called ‘the granary of the world’. Its workforce were not Third World indigenous peoples (most of these had been exterminated, US-style, in the 19th century), but immigrants and seasonal workers from Spain and Italy attracted by wages that were higher than in southern Europe. Output per worker was considerably higher than in France and Italy. [12] Its ruling class had close links with that of Britain-the country was a prime venue for upper class British emigrants, there was a lot of British capital, and about a third of exports went to Britain-but was independent enough to levy protectionist tariffs against British industrial imports and to stay neutral during the First World War (while every British colony and dominion contributed money and men to the imperialist war effort). [13] ‘Argentina, at the start of World War One, had reached being a modern capitalist state,’ says a Marxist history of Peronism. [14]

The problem for the different sections of its capitalist class throughout the 20th century was not that Argentina lacked national political independence. It had enjoyed this since 1816. The problem was that the Argentinian ruling class controlled a state with a relatively small domestic market and relatively few resources in a world of much wealthier capitalist classes with bigger markets and far greater resources. The message was brought home to them with a vengeance whenever the world price of agricultural goods fell, and with it their profits. This happened with the great slump of the inter-war years, when the world price of wheat fell by 75 percent. ‘The Argentinian bourgeoisie, which believed itself to be part of the world’s powerful elite, discovered the fragility of the equilibrium on which its wealth rested ... It could use force to adjust its boundaries with Chile or Bolivia, but it could not force the French to open their country to its grain or meat’. [15]

Its response, from the 1930s onwards, was to try to redirect agricultural profits into the building up of supposedly less vulnerable manufacturing and extractive industries catering for a very heavily protected domestic market. Governments dominated by the agrarian capitalist interests (often referred to as the ‘oligarchy’) began this process, Peron intensified it in the late 1940s, and the post-Peronist governments of the 1950s and 1960s continued along the same path. The industrial capitalist class, now overshadowing the old agrarian capitalist oligarchy, was made up of two interlinked groupings. A mass of private capitalists presided over small and medium industry, while state bureaucrats (including military officers) ran most of the new, large scale industries like iron and steel, autos, power generation and oil. Each maintained certain connections with the trade union bureaucracies, who were thus enmeshed in a web of corruption.

Such measures enabled Argentina to industrialise. Only 13 percent of the population worked on the land as against 34 percent in industry in the early 1970s. [16] The rate of industrial expansion in these years was comparable to that in Italy (then referred to by mainstream economists as undergoing a ‘miracle’, although still one of the poorer West European countries). [17] Some figures for 1972 illustrate the smallness of the distance separating Argentina and Italy at that time [18]:

Argentina

Italy

Kilograms of meat per person per year

90

47

Litres of milk per person per year

70

65

Litres of seed oil per person per year

10.3

7.9

Calories per person per day

3,170

2,940

Cars per 100 people

11.6

20.9

TVs per 100 people

14.9

18.9

Newspapers per 1,000 people

128

85

Inhabitants per dwelling

3.8

3.1

University students per 1,000 people

11.4

11.7

Doctors per 1,000 people

18.9

18.0

Mortality rate per 1,000 people

8.8

9.6

Life expectancy

67.06

65.77

There were differences between the two countries – Argentinians did slightly better as regards foodstuffs, Italians as regards consumer durables. But they were differences between countries at comparable levels of ‘development’, quite unlike those which would appear if the comparison were, say, between Italy and India, or for that matter between Argentina and Guatemala. And Argentina was probably less dependent on foreign capital and foreign imports. Imports only accounted for 1 percent of Argentinian consumer products, and foreign capital, although important in certain industries, accounted for only 5 percent of total fixed investment (as against 15.4 percent in 1943). [19]

There has been an enormous change since 1972. A wide gap has opened up between the living standards of the mass of people in the two countries. With an average hourly manufacturing wage of only $1.67 an hour even before the present slump – and with very large numbers of people getting less – Argentina today is experiencing levels of poverty not known in Italy since the 1940s. [20] Even the average calorific intake has fallen (although it was still at a similar level to Britain in the mid-1990s, and a third higher than in countries like Guatemala and Bolivia). [21] This is not, however, because of ‘underdevelopment’ in Argentina. Rather it is because of the contradictions facing a weak capitalism once it has reached a certain stage of development. From a capitalist point of view Argentina has ‘developed’ since 1972 – yet the condition of the majority of its population has got worse.

No national capitalist ruling class can ever rest on its laurels. Rival national capitalisms are accumulating endlessly, and it cannot afford to lag behind. One ruling over a relatively small economy finds the problems particularly acute, even if the economy is industrial rather than agrarian. Ensuring protected domestic markets has in the past provided a short term solution to some of these problems. But the narrowness of the market means costs of production are likely to be disproportionately high, and the resources at hand for further accumulation correspondingly limited. Hence continual efforts to raise the rate of exploitation as much as possible and repeated restructuring to forcibly shift capital from the hands of small business to those of big business. This is what Argentinian capitalism has been doing for more than half a century. It explains the ferocity of its confrontations with the working class, its political instability, the recurrent resorts to military rule and, most recently, the opening up of the economy to the multinationals, international finance and the dictates of the International Monetary Fund.

Argentina’s capitalists had been able to hide from this problem to some extent during the first five years of Peron’s rule. Food shortages in post-war Europe doubled the price to be obtained for Argentina’s agricultural exports, and the high profits that flowed back to the country enabled the government to buy off working class discontent and industrialise to the benefit of the middle and small bourgeoisie at the same time. By the same token, however, the collapse of agricultural prices in the early 1950s pulled the rug from under Peron’s methods. From 1951 onwards Argentinian capitalism could only continue building up industry by increasing the rate of exploitation. This meant cutting into the living standards workers had come to enjoy. And to keep Argentinian capitalism abreast of its rivals in the world system, accumulation had to be increasingly in industries producing means of production rather than those that could provide the consumer goods workers and the middle classes wanted. For capitalist industry to grow, living standards had to fall.

This explains why the ruling class sent Peron into exile in 1955 – and why those sections of Peronism who were tied by various strings to the national capitalists were unwilling to put up serious opposition to his overthrow. It also explains why the period 1955 to 1983 saw brief periods of rule by civilian elected governments interspersed with longer or shorter periods of military dictatorship. Every spell of industrial expansion drew new people into the workplaces and increased the feeling of working class confidence, which found expression both in industrial militancy and in support for ‘populist’ Peronist politicians who promised at least a partial return to the living standards and welfare provisions people had known in the past. Civilian governments were unable to resist such pressures for long. But Argentinian capitalism definitely did want to resist them, and eventually opted for the return of the hard men from the military to restore order.

The final such cycle was that which ran from the Cordobazo, through the Peronist governments of the 1970s, to the military dictatorship of the junta. The new Peronist governments tried to buy off working class discontent without cutting unduly into industrial profits by printing money, so that prices were rising by 20 or 30 percent a month in mid-1975. The ‘restoration of order’ by the military dictatorship in 1976 was much more vicious than any before. It was not just a matter of the mass killings. There was also an unprecedented attack on workers’ living standards. Real wages in 1978 were only about half what they had been in 1975. [22] This meant they were at a lower level than in 1940. [23]

The attacks on workers and the left were accompanied by a massive rationalisation of industry brought about by an over-valuation of the peso which turned the country into a paradise for speculators. The manufacturing workforce was cut by about a fifth in four years, while productivity from the remaining workers was forced up by 37 percent. [24] Meanwhile half a million workers in the public sector lost their jobs. Yet these measures were not enough to overcome the intrinsic problems of Argentinian capitalism. Economic growth in 1979 was followed by stagnation in 1980 and recession in 1981, while annual inflation remained at over 100 percent. There was growing discontent not only from the impoverished working class, but also from sections of Argentinian capitalism. The war over the Malvinas/Falkland Islands was an attempt to divert attention from these problems. Its failure spelt the end of the dictatorship in 1983. But not the end of the problems of Argentinian capitalism.

A capitalist class in search of a strategy

The victory of the Radical Party of Alfonsin in the presidential elections of 1983 opened the way for a rerun of the classic pattern of civilian governments. Workers pushed to restore the loss in living standards they had suffered under the junta. Argentinian capitalism was not strong enough to deliver these and raised prices to recoup its profits. There were a couple of years of rising output. Then inflation reached astronomic levels – 1,470 percent in the 12 months up to June 1989, 20,226 percent in the 12 months up to March 1990 – just as the economy went into a deep slump. [25] Meanwhile the level of foreign debt had doubled to about $60 billion. Workers suffered economically even more than under the junta – real wages in 1989 were about 25 percent below the already desperate 1980 level. There was a sense of immense crisis for both the capitalists and the working class.

The unions organised no fewer than 14 general strikes in this period. Real hunger now stalked a working population which had once been among the best fed in the world, and there were food riots with the looting of supermarkets in Buenos Aires in 1989. But the old outcome of crises and disillusionment with an elected government, the military coup, could no longer work – three attempted coups in 1987-1988 all collapsed in the face of massive popular opposition (a million people took to the streets against the first) and splits within the armed forces. Instead there was an electoral change, with the routing of Alfonsin’s Radical Party by the Peronist Menem in the presidential elections of 1989.

The crisis of the Alfonsin government drove home to Argentinian capitalists the desperate need to find a new economic strategy. Despite its repeated drives to accumulate and its desperate desire to be competitive internationally, output per head was actually a fifth lower than ten years before. [26] The most powerful and advanced sections of capital had long before begun to press for a new strategy:

The Onganía dictatorship (of 1966-70) already responded to the need for Argentinian capitalism to prepare the conditions of a new scheme of accumulation based on a rupture with the autarky and the entry of industry into world markets. Expanded accumulation needed to pass from the development of an internal market protected by the state through customs barriers to the savage struggle to create space between the great powers of the world market. [27]

The shift from the old strategy was slowed down by the political pressures that arose with the upturn of working class struggle in the late 1960s and early 1970s. It was only with the coming to power of the military junta in 1976 that big capital felt free to push its new ‘neo-liberal’ approach. Reduced tariffs and a high exchange rate led to a flood of imports which undercut a lot of the old medium and small scale firms, and the total number of person hours worked in manufacturing industry fell by 20 percent.

Sections of the regime continued, however, to use the power of the state to try to foster certain industries which were run by the monopolies and sections of the state – ’machinery and equipment’, iron and steel, infrastructure development, electricity and gas, arms production and agriculture all expanded from 1976 to 1980. [28] The military-run state saw the revenues to be obtained from exports of food – now mainly to the USSR – as a source for building up national industrial power (and buying arms). So the state was responsible for more than half of total investment in the years 1976-1978. [29] Big capital grew at the expense of small capital as well as through increased exploitation of the working class. But it still lacked the competitiveness it sought in international markets. Free market perfectionists blamed this on the remaining state controls and nationalised industries.

The crisis of the late 1980s provided them with the political opportunity they wanted to dump these things. The desperate plight in which people found themselves reduced the likelihood of either the working class or the middle bourgeoisie putting up resistance. As living standards sank through the floor and inflation reached unbelievable heights, every class was desperate for an alternative of some sort.

Menem came to office promising to provide this. He had enormous backing from the trade union bureaucracy and most workers. But he also had connections with sections of big business desperate for the new model of accumulation, and turned to the former head of the national bank under the dictatorship, the Harvard trained economist, Domingo Cavallo, to provide it. Cavallo held the messianic view that neo-liberalism was the answer to the problems of Argentinian capitalism.

The neo-liberal miracle maker

It’s springtime in Buenos Aires. The government is selling everything in sight. Huge billboards announce auctions of office buildings on the chic Calle Florida and waterfront acreage down by the docks. Army regiments are being booted out of Buenos Aires so that prime real estate can go on the block. Even the giraffes, ostriches and a 48 year old Indian elephant named Norma now have a private owner, after the city fathers sold the zoo.

The privatisation process stretches far beyond the city. For the first time ever, the government is opening oil fields to private investors. The cash infusion is ending the decade-old debt crisis. ‘In a few months, it will be ancient history,’ boasts Domingo Cavallo, Argentina’s economic minister. As a result, investors are now flocking to Latin America.

The change in the past three years amounts to nothing less than economic revolution. At the centre of it is privatisation. While Communism collapsed noisily in Europe, Latin America’s old orthodoxy, centering on state-run strategic industries, crumbled quietly. Now, the Latins, like the Eastern Europeans, are bowing to the private market and racing for investments to revive their bedraggled economies. The change means megabusiness for First World bankers, who are introducing a continent to the financing and merger and acquisition tricks from up North – and collecting hefty commissions for the help.

So gushed Business Week in 1991. [30] Its optimism not only about the profits to be got from Argentina, but also about the ending of the old cycle of crises and indebtedness, was shared by most of the world’s business media and economic ‘experts’. There was still enormous enthusiasm six years later, despite a brief recession hitting Argentina after the Mexican ‘Tequila’ crisis of 1994. ‘I am very optimistic,’ said Mr Walter Molano, director of economic and financial research at SBC Warburg in New York. ‘The country is clearly seeing the payoff from the reforms undertaken in 1991-1995, some of which have a long gestation period.’ Growth the next year should have a floor of 6 percent, he added. [31] The Financial Times extolled ‘the resilience of the economy after the reforms’. [32]

The ‘reforms’ amounted to a massive implementation of the measures embodied in the ‘Washington Consensus’ as preached by the IMF and the World Bank – privatisation of virtually all government-owned industries and services, the replacement of state pensions and health benefits by private schemes, the slashing of remaining tariffs on imports, the encouraging of foreign capital inflows, and, to cap all these other measures, a rigid fixing of the peso’s value to that of the US dollar (known as ‘the dollar peg’) in 1992. In return for this package of measures the IMF agreed to help the Argentinian government renegotiate its debt payments as part of the overall Brady Plan for Latin America.

The assumption behind this package of measures was that they would further push the restructuring of industry, ‘shaking out’ people from the public sector and inefficient private firms, while encouraging an inflow of foreign capital that would modernise Argentinian industry and enable it, at last, to compete internationally. This fitted in with Argentina establishing the Mercosur regional common market with Brazil, Uruguay and Paraguay.

Such measures were obviously met with joy in international financial circles who were set to gain from buying up Argentinian businesses on the cheap. They were just as welcome to key sections of Argentina’s ruling class, who could move from being big fish in the small Argentinian pond to being medium fish in a world sized lake. But, for a time at least, very large numbers of the lower middle class and workers also acquiesced to them, such was the desperation to escape from the crisis at the turn of the decade and such were the illusions in Menem as a Peronist ‘friend of the workers’.

The reforms were accompanied at first by some limited improvement in the conditions of large numbers of people as the economy grew through to 1994. Average real wages stopped falling and rose above their 1989 low point. [33] And for a couple of years there was a growth in employment in most sectors. [34] The self employed and the small business sectors of the middle class felt that the threat of immediate bankruptcy had gone. The salaried sections of the middle class (or, more accurately speaking, the better off sections of the white collar working class) saw their differentials as against semi-skilled and unskilled workers’ increase. [35] The sense, at least for some people, that things might be beginning to get better, was sufficient for Menem to win the presidential election of 1994 and his Peronist party the mid-term congressional elections of 1996. As with the ‘Thatcher-Lawson’ boom of Britain in the late 1980s, there was just enough movement in the conditions of a considerable number of people to make the illusion of permanent change and talk of a ‘miracle’ stick.

But by 1992 rationalisation and restructuring of industry were occurring in earnest. There was a massive destruction of certain jobs-about one in ten jobs in manufacturing and about one in five in electricity, water and gas. Unemployment began to climb sharply, reaching 18 percent in 1994-1995. And from then on high unemployment persisted despite renewed recovery from 1995 to 1998. While extolling the effect of ‘reform’ in 1997, the Financial Times was able to note:

Higher growth has failed to translate into a significant fall in the unemployment rate, despite signs that job creation is rising. The high level of joblessness was one factor behind an increase in social tensions during the year. [36]

So for the mass of workers, the ‘miracle’ meant only that real wages remained more or less static at their historically low level, while a growing pool of people were faced with long term unemployment. Since unemployment compensation lasts for a few months only, this translated into growing pools of deep poverty.

But the ‘miracle’ hardly matched up to the historic hopes of the Argentinian bourgeoisie either. Gross National Output grew by about 25 percent. But this only put it back roughly where it had been ten years before. And the industries Argentinian capitalism had sought to create over the previous half century were not able to conquer world markets – or even the regional market formed by Mercosur. Instead, as under the junta, foreign goods flooded into the country while exports remained subdued. There were recurrent balance of payments deficits.

Infusions of foreign capital and the privatisation receipts were able to hide the gap and conceal essential weaknesses, allowing Cavallo each year to assure fellow members of the ruling class that a dramatic breakthrough was about to occur. What he chose to forget was that foreign capital that could flow into a country at great speed could flow out again even more quickly the moment any event shook its confidence in the level of profits to be obtained. Meanwhile levels of foreign debt crept inexorably higher.

The crash and the crunch

The moment of truth came with the impact on Latin America of the Asian crisis of 1997. Suddenly, financiers and business people everywhere were shocked into worrying about their investments in supposedly safe and profitable ‘emerging markets’ – including those of Latin America – and moved their money out of them. Argentina was pushed back into recession, only two years after recovering from the recession associated with the Mexican crisis of 1994. And the loans the government and businesses depended on were increasingly costly as lenders, foreign and Argentinian alike, demanded massive premiums over and above normal interest rates. As Joseph Stiglitz, the mainstream economist who was sacked for being critical of the World Bank, has pointed out:

East Asia’s crisis of 1997 became a global financial crisis, raising interest rates for all emerging markets, including Argentina. Argentina’s exchange system survived, but at a heavy price – double digit unemployment. Soon high interest rates strained the country’s budget ...With 20 percent interest rates, 9 percent of the country’s GDP was spent annually on financing its debt. The US dollar, to which Argentinian’s peso was tied, increased sharply in value. Meanwhile, Argentina’s Mercosur trading partner, Brazil, saw its currency depreciate. Wages and prices fell, but not enough to allow Argentina to compete effectively. [37]

Argentinian capitalism’s longstanding weakness when it came to competing with Brazil was exacerbated as Brazil’s devaluation made its goods cheaper, both on international markets and inside Argentina. Argentinian companies, unable to borrow easily, set out to protect their profits by cutting down production lines and cutting wages. Car production sagged 47 percent in a year. [38] The number employed in textiles and footwear was half what it was in 1990. [39] And then, last year, the economic crisis beginning in the three centres of advanced world capitalism (the US, the European Union and Japan) began to bite. Unemployment soared upwards until it reached 20 percent and private sector wages were slashed by a fifth from their already low levels.

The sackings and wage slashing exacerbated the crisis of the small and medium business sectors. By September 2001 total sales of goods were down 8.4 percent on the previous year and sales through ‘shopping malls’ down 21 percent. [40] Official figures were by now showing that 40 percent of the population were living below the poverty line. This was an economic catastrophe comparable to that which hit countries like Germany and the United States in the early 1930s.

But things got even worse in the last quarter of the year. The country was running a trade deficit and the government was spending more than its income, since each contraction of the economy reduced tax revenues (they fell 14 percent in the year to September 2001). It simply did not have enough dollars to continue paying its bills – and its whole political approach ruled out seizing these dollars from the Argentinian rich, who were moving their own money to safe havens abroad. It could only keep going by turning to the International Monetary Fund, which demanded further cuts in government spending.

This meant pursuing an economic policy mainstream economists used to insist had been the fatal ‘mistake’ of the 1930s which would never be adopted again. Every cut in government spending was bound to deepen the recession, and every deepening of the recession was bound to make the government deficit greater by cutting its revenues further. Nevertheless, this is what the IMF recommended – and what Argentinian governments of both the main capitalist parties accepted.

The politics of recession

The onset of renewed recession had doomed the Menem government. The 1999 election resulted in a clear victory for an alliance of the Radical Party and a new, supposedly left wing, electoral bloc – Frepaso. But the new government proceeded to follow the same policies as its predecessor, introducing a cuts package in May 2000 and then again a year later. Popular resistance forced the president, de la Rua, to withdraw the March 2001 package and to sack its author, Lopéz Murphy. But the supporters of neo-liberalism were soon ecstatic, for de la Rua replaced him with Cavallo. The return of the ‘miracle workers’, they said, could once again dig Argentinian capitalism out of its hole.

Within five months his miracle working power proved to be fraudulent. He was forced to turn to the IMF for more funds, agreeing to still more drastic budget cuts and imposing 13 percent reductions in public sector wages and pensions – with the blessing of Tony Blair who stopped off in Argentina before going on to holiday in Mexico. By this time, however, it was becoming clear that whatever he did, apart from imposing mass starvation on the country, there was no way Cavallo could balance the government’s budget. As a Financial Times editorial had to admit:

It is now clear that Argentina is unable to escape its slow motion train wreck by orthodox means. Because output is falling, the fiscal position is worsening. That impairs confidence, which has pushed interest rates on dollar borrowing to almost 20 percentage points above those on US treasuries. With such interest rates, the economy can only implode. The logical step then seems to be a combination of devaluation with default. But the fear has been that this would merely trigger a flight from the currency and a return to very high inflation. Moreover, if substantial dollar liabilities remained, there could still be mass bankruptcy. [41]

A week later a former chief economist of the IMF stated the heretical view that there was no way the government could clear the deficits as the IMF wanted:

Realistic appraisal of Argentina’s plight carries ...implications for international policy making. This year’s public sector deficit will be much greater than the IMF programme target of about $6 billion ... This year’s fiscal deficit will probably run to between $20 billion and $25 billion. With the economy deeply mired in recession, the government’s true financing requirements for 2002 probably cannot be reduced below $12 billion to $15 billion. [42]

Cavallo was not prepared to listen to such talk. He even resisted suggestions from some in the IMF that he should follow the Brazilian example and devalue the peso. Meanwhile, the IMF itself was refusing to do anything positive to help him out. The Republican administration in Washington did not regard Argentina as strategically important and was talking about the ‘moral hazard’ of easing Argentina’s debt burden. It even went so far as to suggest that those who had been foolhardy enough to lend money to the country should accept some of the burden of their mistake. No doubt this view was encouraged by the fact that European – especially Spanish – companies would be disproportionately more damaged by an Argentinian collapse than US ones. [43] And so the IMF began making it clear that it would not release funds it had promised Cavallo unless there were further savage cuts. Already, provincial governments, unable to pay their workers with proper currency, were resorting to the use of special coupons, supposedly exchangeable for goods in certain shops.

Now Cavallo turned to measures that impoverished not only the workers but a vast sector of Argentina’s self employed and professional middle class. He took money from the privatised pension funds to pay interest owed on the debt, and then imposed the fencing off (corralito) of all personal bank accounts, so that people could not withdraw more than $1,000 a month (around £150 a week). People rushed to try to get money out of their accounts – and found themselves faced with empty cash machines and endless queues. Then, on 17 December, he introduced a new $9 billion cuts package.

Much of the media internationally presented the corralito as only hitting the well to do. In fact, the very well do to had long before moved their dollars to safer havens abroad. The corralito did hit the middle and lower sections of the traditional petty bourgeoisie – self employed professionals, small business people with a couple of employees, shopkeepers. These groups would keep most of their income in the banks and would look to their savings to see them through rough patches due to lack of business, illness or failure of other people to pay their bills to them. They could now suddenly be left with no income. So too could vast numbers of white collar workers whose salaries had been paid straight into their bank accounts. Finally, many of the manual unemployed also relied on the banks to stay alive, after putting any redundancy payment or past savings into them.

In reality, what Cavallo was doing with the corralito was declaring that Argentinian capitalism and its state cared no more for the so called middle classes than for the workers. It was the ultimate act of proletarianisation. The impoverished middle classes responded by swarming onto the streets with the unemployed on 19-20 December – and driving the government from office.

Cacerolazos and piqueteros

The uprising of 19-20 December was ‘spontaneous’ in the sense that no single body issued a call for it and no single political force directed its development. It was reminiscent of 14 July 1789 and February 1848 in France, February 1917 in Russia, November 1918 in Germany, October 1956 in Hungary, May 1968 in France – and, more recently, December 1989 in Romania, 1997 in Albania, and 2000 in Serbia. On each occasion, the anger of myriad different groups with their own particular grievances suddenly fused into an explosive force which established rulers could not resist. Some of the rulers ran for their lives. Others bowed before the force of the angry movement in order to try to re-establish their full control at a later date.

Accounts of the Argentinian uprising tell how it had various sources. There were the hungry people who gathered outside supermarkets demanding food and who turned to looting and to attacking banks when they did not get it. There were the people who began gathering in the districts (barrios), banging their cooking pots (cacerolas) in anger at the corralito, and then moving towards the city centre. There were the young people who flooded to join the mobilisation once it was under way. There were the Madres de la Plaza de Mayo – women protesting, as they did every Thursday, against the ‘disappearance’ of their children and husbands during the junta’s dirty war. But once these groups had come together, fighting back despite the police killing 23 people in Buenos Aires (and another 20 nationally), so as to force Cavallo to resign and President de la Rua to flee, there was the sense of movement to the cacerolazo (’cooking pot event’) that transcended their particular demands. So it was that nine days later they were on the streets again, this time directing their anger against Cavallo’s successor, Rodriguez Saá, and invading the Congress to force his resignation. And three weeks later, the Buenos Aires mainstream newspaper Página 12 could describe a further wave of protests as, ‘The spectre which puts fear into the Pink House [presidential palace]’. [44]

By this time there was a certain set pattern to the protests in Buenos Aires. So Página 12 describes a typical protest involving both well-to-do middle class and poorer districts:

The cacerolazo began in many points in the city and was growing in numbers and intensity. In the Barrio Norte they started on the balconies and in the doorways, with cars sounding the horns enthusiastically. There were still no songs or banners, and no one had blocked the road, but the volume of sound began to deafen you. By 9 p.m. in the Belgrano neighbourhood they began to come down from the buildings into the street. There was a group banging metal and singing ... Another group began to grow in Cabildo and Juramento. In San Cristóbal, a neighbourhood very active in the previous cacerolazos, people gathered in San Juan and La Rioja. At 1 p.m. the concentration in front of the congress began. First a few dozen, then some hundreds and finally ever larger groups arrived from other neighborhoods along roads which were completely blocked. When there was a critical mass, a column formed up which began to go down towards the Plaza de Mayo. [45]

The aim of the protesters was to bring about a change in government policy – or even a change in government as they had on 20 and 29 December. And when they were not immediately successful, the younger and poorer sections of the crowd would attempt to fight their way towards the Congress building, leading to violent confrontations with the police.

This pattern of repetitive street protests is very similar to that which characterised the Great French Revolution of 1789-1794, with its journées – days when the population of the poorer parts of Paris would swarm from the streets towards symbols of power in the city centre. A 21st century uprising was taking the form of the archetypical 18th century revolution!

After the first successful spontaneous uprising people began to see the need to organise themselves. Sections of the media were attempting to give the impression everything was over, claiming everyone had gone to the beaches (it was, being in the southern hemisphere, high summer). Others painted a picture of the middle classes living in terror of mobs of poor people invading their homes and stealing their belongings (reminiscent of ‘the great fear’ of the French Revolution). And some of the most powerful trade union leaders had thrown their weight behind the government and were trying to isolate the protests. Meanwhile, there were real problems with relying simply on spontaneous action. There were cases of the unemployed and the hungry poor attacking not only the large supermarkets and agribusinesses, but also small shopkeepers and street traders nearly as poor as themselves, which risked driving them into the arms of the government. The young people who bore the brunt of the fighting with the police could easily end up isolated from the mass of demonstrators, making it easier for the secret services to engage in provocations designed to justify repressive measures. Finally, there was also a need to prevent Peronist leaders in the government resorting to an old trick of mobilising ‘lumpenproletarian’ mobs to attack protesters for 30 to 50 pesos a day.

People began to get together in ‘popular assemblies’, as a Buenos Aires newspaper from one of the poorer parts of the city reported:

They are residents of San Cristóbal. ‘In the last weeks we’ve been between euphoria and fear’, they say. ‘We have done things which we never even thought of and we still don’t know what else we’ll have to do.’ They met up on the corner of La Rioja and San Juan for the protests against de la Rua and marched to the Congress, and they got together the next day to denounce the repression. They made another cacerolazo when the Legislative Assembly appointed Duhalde. On the Sunday 150 people responded to a call to meet in the Plaza Martin Ferro and organised an impromptu assembly. Now they have decided on a more stable form of organisation ‘apart from the parties’.

Among them were ‘a priest, various housewives, two members of the Communist Party, a member of the Workers Party, a bar owner, half a dozen unemployed people ... the local leaders of the Peronist party, various social psychologists, university students and a group of workers from the nearby hospital’. ‘We are drawing up a list of all the unemployed in the neighourhood,’ said one. Others tell, ‘We are taking care of security, because there were unknown people on the last cacerolazo,’ and, ‘We are calling a new cacerolazo against the rising prices’. [46]

Soon assemblies like this were blossoming right across greater Buenos Aires and in dozens of provincial centres. A description by a journalist for the French paper Libération has provided a sense of the atmosphere at them, in a well-to-do neighbourhood:

It’s 11 p.m. at the crossroads of the avenues Cabildo and Congreso. With a megaphone in his hand a man of about 30 tries to get some order. ‘We are going to proceed to a vote on the ideas formulated this evening’ – non-payment of the foreign debt and an inquiry into its legitimacy, nationalisation of the banks, revisions of the contracts with the foreign enterprises running the public services, whose abusive behaviour has exasperated everyone. This Monday they had been meeting for three hours. Twenty people have spoken. A chair has tried to restrict them to two minutes, but most have exceeded that. They are not activists of any party. They have come with a single banner which has stopped the traffic: ‘The Popular Assembly of Belgrano district’.

For a month this scene has been repeated every evening, from Monday to Saturday in one or other district of the city. And on Sunday, there are around 5,000 people in the Centenario park for the mother of all assemblies, which brings together people from the whole city. From these popular assemblies was born the first cacerolazo on a national scale which brought tens of thousands of people onto the roads of all the big cities. [47]

A journalist for the Mexican left wing daily La Jornada paints a similar picture:

Dozens of district assemblies are functioning, a genuine product of the popular organisation that grew out of the rebellion of the cacerolas. They are demanding the truth about the situation and punishment for those responsible as the anger grows against the foreign banks and privatisation. In these assemblies they are talking today of the ‘10 billion that the electricity companies Edenor and Edesur have taken, of $800 to $1,000 million dollars of profits made each year by the telephone companies’. [48]

A participant at one of the city-wide assemblies in the Centenario park reports:

There were about 6,000 people there, from more or less 80 neighbourhood committees from the city and the suburbs and including the piqueteros. The slogans reflected the maturity of the demands of the different assemblies and the necessity of constructing bigger channels of popular feeling, independent of the political apparatuses. [49]

The demands included non-payment of the foreign debt, nationalisation of privatised enterprises under the control of workers and the neighbourhood committees, punishment of those responsible for repression on 19-20 December and 25 January, establishment of security committees at both the district and the city level to deal with police attempts at provocation in assemblies and demonstrations, support for the unemployed piqueteros, the calling of a national congress of piquetero organisations and popular assemblies, support for the struggles of railway, telecommunications and textile workers, and criticism of the behaviour of the union leaders in not backing these.

Similar gatherings were taking place in numerous provincial towns, big and small – in Córdoba, in Neuquén, in the small Tucumán towns, in Mercedes, in La Plata, in Olavarria, to name just a few. [50] And in each case, they were not mere talking shops. Their discussions were about local activities – demanding medicines for the local pharmacies, supporting workers fighting to keep their plants open, going to supermarkets to demand food, going to the banks to insist on payment for public sector employees, protesting against repressive measures, as well as raising again and again the demands for renationalisation of the privatised concerns, action against the banks, and opposition to the corralito.

The neighbourhood committees and popular assemblies express the need of those who have overthrown presidents to organise themselves. They are the form taken by the mass, popular repudiation of the old order. In this respect they have certain similarities with the characteristic forms of mass self organisation that arose in the great working class struggles of the 20th century – the workers’ councils or soviets. But they also have very important differences from these.

First, the popular assemblies are not yet bodies of delegates. The people at them represent themselves, but do not have an organic connection with some group of people who they represent – and who can recall them if they do not carry out their will. Second, they draw together people from very different class backgrounds, as is shown by the fact that there are neighbourhood committees in the prosperous parts of Buenos Aires like Belgrano and Libertador as well as in working and lower middle class areas.

Finally, the popular assemblies are not anchored in the workplaces where millions of Argentinians are still drawn together on a daily basis to toil. They are mainly collections of individuals from the localities and the various piqueteros organisations of unemployed workers. Reports tell that in some of the assemblies an important leading role is played by unemployed activists shaped by their role in past industrial struggles – the CCC banner of the Corriente Clasista y Combativa (Combative Class Current) features in many of the protests. But this does not make them into an organic expression of Argentinia’s working class with its long and militant history. They are, in fact, closer to the sections – the nightly district mass meetings – of the French Revolution than to the workers’ councils of 1905 and 1917 in Russia, November 1918 in Germany, or October and November 1956 in Hungary.

There is another, linked feature of the popular assemblies and the cacerolazos. Although the demands they raise challenge the whole structures of Argentinian capitalism, much of their language is not anti-capitalist, still less socialist. Instead, it focuses on the one hand on the corruption of the political elite – those leading the two mainstream political parties, the supreme court, the generals – and on the other on the pernicious role of foreign capital in privatisation. The language is nationalist, the most frequent banner the national flag, the most popular chorus that of the national anthem.

To understand these features, it is necessary to look at the historical development of the Argentinian working class movement.

Peronism and the unions

Peronism dominated the Argentinian working class movement for more than half a century after 1945 much as Labourism dominated the British working class movement. It had not always been so. At the time of the Semana Trágica in 1919 there were very powerful anarchist, syndicalist and reformist socialist currents, and from the early 1920s to the early 1940s Communism was a significant force. But from then on Peronism was dominant.

Juan Peron himself was influenced by the ‘corporatist’ notions of Italian fascism (he spent two years in Mussolini’s Italy and was in exile in Franco’s Spain in the 1960s). But the movement he built was certainly not fascist. In the years 1943-1945 he managed to put together a formula which appealed to sections of workers, sections of the bourgeoisie and parts of the state machine alike. It shifted resources from the agrarian sector into the building of industrial firms catering for a protected domestic market while conceding to many of the demands of an already militant working class. And it was able to portray this as a struggle of the whole Argentinian ‘nation’ against a parasitic ‘oligarchy’ tied to ‘imperialism’. This enabled him to take over the trade union bureaucracy from its old Communist or Socialist leaders, either buying them off or imposing his own people in their place, with the acquiescence of the workers.

The formula was wearing a little thin by the time the military ousted Peron in 1955 against a background of falling working class living standards. But the attacks on workers’ organisation under the succession of non-Peronist governments over the next 17 years reinforced its hold. The Peron period seemed like a golden age compared with what followed. And the image of Peronism as a working class political force was strengthened by the fact that the trade union bureaucracy was the centre of organised Peronism for the 17 years during which the Peronist party was banned. For the great majority of Argentinian workers, Peronism was the working class movement in those years. The majority of the battles they waged against a succession of military and civil governments were battles waged under its banner.

Yet it remained a cross-class alliance dominated by the requirements of a section of Argentinian capitalism. Politically it represented a middle bourgeoisie, which benefited from a protected market, and the bureaucrats running the big new state industries and banks, as well as the union bureaucracy. The union bureaucracy itself was from the beginning corrupt, its individual members often enjoying lucrative connections with the other elements within Peronism. But it still had to fight for its position. So its behaviour was not just bureaucratic. It could see the need on occasions to use carefully controlled but very militant – and sometimes very violent – actions so as to assert its own interests and make sure it kept workers’ allegiance. It was, in some respects, more like a corrupt US union like the Teamsters during the reign of Jimmy Hoffa than the British TUC, except it played a much more central role in mainstream bourgeois politics.

The second period of Peronist rule, from 1973, came close to tearing the political movement apart. A new generation of students and young workers had given their own revolutionary interpretation to Peronism during the bitter repression of the Onganía dictatorship of the late 1960s. They saw Peron’s nationalism as one of a kind with that of the Cuban revolution, Che Guevara and the Vietnamese liberation struggle, and interpreted the struggle of workers in Argentina as part of a national struggle against imperialism (even though the Argentinian bourgeoisie had long enjoyed national independence, there were no foreign bases and little foreign capital). This led the armed left wing Peronist youth, the Monteneros, to throw their weight behind strikes, occupations and clashes with the forces of the state. But once Peronism was back in power, the bourgeois forces within it and the political bosses linked to them increasingly looked to repress the workers’ movement and the left. By 1974-1975 Lopez Vega, the key minister in Isabel Peron’s government, was organising armed bands (the AAA Anti-Communist Alliance) to murder trade union militants and leftists, including those still formally within the ranks of Peronism. The trade union bureaucracy was caught between welcoming the attacks on the left and needing to maintain its hold over the working class – and its own standing in relation to the ruling class – by making certain militant gestures (like calling the first ever general strike against a Peronist government in 1975).

The crisis within Peronism allowed other political forces to begin to have an impact. ‘Classist’ currents, which looked to the working class, not an alliance with ‘patriotic employers’, were important in ‘new’ industries like those in Córdoba. Maoists developed influence in a few local unions. A Trotskyist organisation which had entered Peronism broke away with several thousand members, before itself splitting between a Guevarist wing, the PRT/ERP, centred around guerrilla warfare and with considerable influence in places like Córdoba, and a rival party, the PST, oriented to work within the unions. [51]

Yet the influence of Peronism persisted. It did so because Peronism was the main Argentinian form of reformism, even if it was a reformism rather different to European social democracy. Workers without the confidence to take on and defeat capitalism through their own efforts looked to the Peronists to do limited things for them within the existing system. They would not shift their allegiance entirely until they found a revolutionary political force that could lead them to at least limited victories. Hence the paradoxical reality that the very defeats brought about by Peronist leadership could lead workers to lose confidence and so continue to rely on such leadership.

The onslaught on the left helped the Peronist bureaucracy after the coup of 1976. Rank and file militancy was literally decimated – estimates suggest that 10,000 out of 100,000 shop stewards were murdered during the military dictatorship. The bureaucracy remained more or less intact, maintaining contacts with the leading generals, and was able to re-establish an open national presence and then to make a gesture to the economic bitterness of ordinary trade unionists by calling one-day general strikes.

After the fall of the junta, opposition lists won elections in certain unions, but the influence of Peronist ideas on the working class as a whole was strong enough at the end of the 1980s for people to see the election of Menem in 1989 as a great victory. As a study of workers’ struggle in the Buenos Aires shipyards reports:

In this moment, the great majority of workers believed that Peronism in power would mean a return to the epoch when the workers received 47 percent of the national income and could have a job and wage that allowed them to survive ... In the shipyards, even the most militant sectors did not lose all their illusions in the bourgeois parties, the trade union hierarchy, and the laws and the justice of the employers. [52]

These illusions allowed Menem and Cavallo to push through privatisation and restructuring without facing coordinated resistance. There were explosions of bitterness, with strikes and occupations over factory closures and redundancies. But these were usually isolated explosions, followed by defeat and demoralisation. All the time there was pressure on workers to work harder, with the management openly threatening to close plants if they did not. In these circumstances the carrot of redundancy payments had a similar effect to, say, that in Britain in the 1980s. Many workers who saw little hope of saving everyone’s job through collective resistance opted to take the bribe.

So in the militant shipyard of Astilleros de Rio Santiago thousands of workers ended up accepting voluntary redundancy in the year 1981. One of the activists admits, ‘The voluntary redundancy was a temptation for everyone, including me’. [53] The Marxist historian of the Argentinian labour movement Pablo Pozzi writes, ‘Unable to find other employment, laid off workers set up small businesses, such as newspaper stands, vegetable and grocery stores. For instance, between the years 1988 and 1994, the number of taxi cabs in Buenos Aires increased from 36,000 to 55,000’. [54]

Those workers who kept their jobs became more dependent than before on the meagre protection provided them by their union membership. But lacking the confidence to take struggles into their own hands, this meant dependence on the union bureaucracies. Even when it came to redundancy, it was better to have bad redundancy terms negotiated by the union bureaucrats than deplorable ones imposed by the employer without any negotiation. Sections of the union bureaucracy did feel compelled to distance themselves from the government and split from the main CGT. But this was not the same as giving a lead to mass struggle.

Even when workers finally lost faith in Menem in the mid-1990s, many retained illusions in his former vice-president, Duhalde, now governor of Buenos Aires. He used his position to try to distance himself from the central government and so, for instance, ‘created illusions in the immense majority of the shipyard workers’. [55]

At this time Duhalde was also trying to create his own Peronist political apparatus apart from the unions through ‘a neighbourhood provincial network structured around the manzaneras (women block leaders). These women served as a conduit for government aid and as a connection for political favours ... They served as an element of neighbourhood control and political mobilisation’. [56] Even in recent weeks, reports suggest Duhalde had enough influence in some of the poorer parts of the city to pay ‘lumpenproletarian’ groups to mobilise on his behalf, initially against the de la Rua government and then against the left.

The bitter experience of the 1990s did shake the hold of Peronism over organised workers. By the end of the decade there were three rival trade union federations – the official CGT, firmly in the hands of old-style bureaucrats, a rival dissident CGT-combatiente, standing a little apart from official Peronism, and the CTA, verbally inclined towards the left. But the methods of these rival federations were not fundamentally different to that of the ‘official’ CGT. They called occasional strikes to put pressure on the employers and the government, but they did not attempt to maintain sustained struggles in defence of their members. In 1997 the CTA was able to involve about 40 percent of the country’s workers in a general strike, creating an atmosphere in which it was not long before the CGT had to call for such action against the Menem government. But its leaders still saw their main function as to exert pressure on those in power and campaigned electorally for the bourgeois Radical-Frepaso coalition. [57]

The limitations of all the union federations were shown in last December’s events. There was a general strike on 13 December. But the unions took no action in the crucial days after that, so that as an organised force workers simply were not present on 19-20 December. Only when the government was already on its last legs on 20 December did the CTA announce a general strike for the next day – a strike which was called off after the government fell. And in the days that followed, instead of taking the head of the anti-government feeling among the vast mass of the population, the CGT leaders met with Rodriguez Saá and proclaimed him as one of them, a ‘Peronist of the old sort’.

Since then the CTA federation has given support to some protests, and so have some local union bodies. But the two main federations have continued to stand apart from the protests, attempting to isolate the millions of workers who still hold jobs, however precariously, from the movement that has been sweeping the streets and the neighbourhoods.

The bitter decade

The rising was spontaneous. It would be absurd to claim otherwise. [58] But that does not mean that there were no currents of opposition that prepared the ground for it. The bitter attempts by workers to stop closures and impose redundancies through the 1990s may have been defeated, but they kept alive a spirit of resistance, in the face of which even the hard-nosed neo-liberals in the Menem government had to make occasional concessions. The one-day general strikes called by the union bureaucracy may have usually had an almost ritualistic character, without pickets or demonstrations. But they did bring large swathes of industry and transport to a standstill, showing that there was a power that could paralyse the country. They also forced the neo-liberals to back off from certain of their demands (as when Cavallo resigned in 1996 when he wanted to cut family allowances and salaries). [59] Those who dismiss these strikes out of hand fail to grasp the simple fact that they showed the potential power of the workers, despite their passivity. [60]

Along with these ‘old’ forms of struggle, new ones began to arise. Already, the economic crisis of 1989 saw the first spontaneous riots:

In 1989 the people in the Patagonian province of Chubut mobilised for a week to get rid of a governor. Later, in June of that year, thousands of people in Buenos Aires and Rosario rioted, sacking supermarkets and grocery stores. Over the next two years neighbours in different cities and towns took to the streets several times ... By 1993 the riots had turned more violent, with people attacking (and burning down) the government house in north western Santiago del Estero province, as well as in Jujuy, La Rioja, Chaco, Tucumán, and Corrientes. The main characteristic of these riots was the unexpectedness, the fact that they happened quickly, lasting rarely more than a day, and left no visible forms of organisation. In a sense, they were more a catharsis for accumulated anger and frustration than a new form of struggle. Though violent and pervasive, they were relatively easy to control. In all cases the government attempted to ignore the upheaval, hoping it would die down, and when it didn’t its response included repression by security forces. [61]

In the first part of the 1990s these local near-uprisings were short lived and isolated from each other. They also did not lead to any permanent organisation. This began to change by 1996. A series of struggles in Neuquén province, in Patagonia, were symptomatic of the new trend:

Cutral Có and Plaza Huincul are two townships in the upper Patagonian Neuquén province, with some 55,000 inhabitants ...built and developed around the petroleum industry ... YPF (the state oil firm) was privatised between 1994 and 1995, with over 80 percent of its employees being laid off as a result. By 1996 the townships had a 35.7 percent unemployment rate, and 23,500 persons were below the poverty line. By June 1996, the local governor had failed to sign an agreement with a Canadian corporation to establish a fertiliser plant in the area, and the local population took to the streets. Local shopkeepers closed their doors, and all over the two towns barricades were set up manned by some 5,000 residents. Those people manning the barricades became known as the piqueteros (pickets). Security forces besieged the entrenched townspeople. [62]

The governor of the province managed to end the unrest after a week by promising negotiations with a committee of townspeople and subsidies for the poorest families. But struggle erupted again nine months later during a teachers’ strike against redundancies and salary cuts. The nearby highways were blocked, leading to clashes between the police and youths armed with sticks and slings, with the police killing one woman.

In this period there were similar such protests and clashes in Tartagal and Jujuy in the north west, and La Plata and Buenos Aires on the coast: ‘National highways were blockaded by pickets, students demonstrated and confronted the police, workers and farmers went on strike ... The uprisings had an effect on the popular imagination ... Each new conflict helped set off others. Innovations in modes of struggle spread from one to the other’. [63] What is more, new ways of organising the struggle were also emerging. Typically they were run by popular assemblies, mass meetings at which all those involved in the action could take part. This was very different from the bureaucratic chains of command which characterised the unions in all three union federations.

There was a brief lull in the spread of such struggles in 1997-1998, as people expected some improvement in their situation from elections. But disappointment soon led to them arising on an even bigger scale. There were major movements in the city of Nequén, General Mosconi, La Esperanza, Jujuy, Cipolletti, Oran, Bahia Blanca, Comodoro Rivadavia. In Tartagal, near Salta, in the far north west, people attacked the police station. [64] In the second half of 2000 the movement of the unemployed intersected for the first time with a mass mobilisation of employed workers. In the Buenos Aires suburb of Matanza, with its 2 million population and the country’s biggest concentration of industry in the 1970s, 1,000 unemployed piqueteros blocked a major highway for a week. A second wave of struggle in Tartagal brought together the unemployed and transport workers who blocked the roads. When the police shot a demonstrator dead, people occupied a police station, took the police officers hostage and seized their arms. [65]

The different movements came together again, on an even bigger scale, the following March (2001) in the popular upsurge that led to the resignation of Lopéz Murphy from the government and his replacement by Cavallo. The announcement of massive cuts in the education budget led to a wave of struggle among students (although still led by the youth branch of the governmental Radical Party), a 48-hour strike by teachers, a march by the unemployed organisations on Buenos Aires and then a 24-hour general strike by all three union federations. ‘The strikes, the occupations of universities, the general discontent created a very difficult situation for the government’, wrote the commentator Pasquini Duran in the daily Página 12, ‘The economic options available had to take into account an essential fact – society had said “Enough!” ... For the first time for a long time, the politicos feared civil disobedience more than the markets’. [66]

The unemployed movement continued to grow from May to August 2001, with two national conferences of the piquetero organisations and the shutting down of 300 major highways by tens of thousands of pickets. Clashes with the police killed five pickets. [67] Analysing the March crisis, the Argentinian Marxist Roberto Saenz quite rightly noted:

We can say that a new cycle of struggles has started which has features very distinct from these prevailing in the struggles of the past decade. Everything is being questioned. In the population there is a state of permanent debate ... There is a new vanguard developing within the popular layers, which is beginning to acquire certain features, above all within the unemployed movements, but also among sections of the employed ... The new movements arise in general outside the old traditional trade union organisations, with direct democracy from below and new leaders. [68]

The new forces and the new forms of struggle, then, were already showing in March last year that they could shake society to its roots-and this at a time when the ruling class was increasingly split over what to do about the acute financial crisis of both Argentinian industry and the state. That is why those on the Marxist left who spoke then about the development of a potentially revolutionary (or ‘pre-revolutionary’) situation were correct.

This did not mean, however, that the consciousness of those leading the new movements was itself automatically, or even generally, revolutionary. Different people who got involved brought with them different conceptions of how to fight, and also different expectations of what could be achieved. This was shown by the early struggle in Neuquén province. The militant youths who fought physically against the police were bitterly angry when the main local leaders agreed to a compromise with the governor that provided a few jobs and a few subsidies for the very hard up. The same sorts of divisions expressed themselves in the major movement in Matanza. Its leaders agreed after a week of blocking the road to call it off in return for ‘job plans’ doing public works for 7,500 out of the hundreds of thousands unemployed in the district. A minority of protesters were not happy with this, but did not have the confidence to challenge the existing leaders. [69]

The fact that people are unemployed does not automatically stop them attempting to find remedies within the existing system. What motivated most people to join the protests was the desire to deal with the immediate, desperate situation. So it was that major tendencies with the piqueteros movement looked to pressurising the government for small improvement, like ‘job plans’, rather than to an apparently distant chance of social revolution. This was true of the major forces involved in the Matanza struggle – the MTA union and the Corriente Clasista y Combativa. It was also true of those who dominated the national meetings of the piqueteros in the summer of 2001. But simply demanding ‘job plans’ could play into the government’s hands. It could promise such things and then hope to go back on its promises once the immediate protests were over. And it could also expect the implementation of such schemes to draw some of the unemployed activists into its own patronage networks. One critic pointed out, ‘The political clientism created around the miserable pay that is to be got for cutting weeds or painting kerbs benefits most the bosses of the various political parties who negotiate with the hunger and poverty of the unemployed’. [70] Such tendencies mean that it is quite wrong to romanticise the unemployed movements and contrast them as ‘genuinely revolutionary’ in contraposition to the employed workers in the workplaces.

The media and the mainstream parties may have created prejudices against the unemployed among those with jobs, claiming them to be lazy and not interested in work. But the movements of 2000-2001 showed the possibilities of linking the unemployed movements and the most militant sections of employed workers. For instance, an important part was played in the organisation of the Matanza protest by workers sacked from a refrigeration plant and former trade union militants. And workers from important workplaces sent delegations to provide material help to the blockaders. [71]

Despite the scale of the struggles last year, neither the employed nor the unemployed sections of the working class had broken with the idea that their demands could somehow be fulfilled within the present system. Brought up within the present system and knowing no other, they tended to continue to take it for granted, at the same time as their own struggles were running directly counter to its requirements. Or to put it another way, they wanted one thing in practice, another in terms of the old ideas that still existed in their heads. This ‘contradictory consciousness’ (to use Gramsci’s term) encouraged a continued tendency towards reformism. Not surprisingly, there seems to have been a certain rise of new versions of left reformism just as the struggles were piling one on top of the other. So opinion polls showed one of the most popular politicians at the time to be Elisa Carrió, a former Radical Party MP who had switched to opposition to the de la Rua government. And even some of the militant organisations involved in organising the piqueteros still seem to look to an alliance with supposedly anti neo-liberal sections of ‘national’, ‘productive’ capital.

The tendency of people to look for reformist options will not have disappeared, despite the successes of the popular movement on the streets. In every great revolutionary upheaval there is a double trend. Those who have been militant in the past tend to move further to the left until they begin to break with old reformist nostrums. But millions of new people move into action for the first time, and they tend initially to identify with prominent political figures who seem radical but not ‘unrealistically’ revolutionary. In the Russian Revolution of 1917, the overwhelming majority in the soviets immediately after the February revolution backed the Provisional Government. In the German Revolution of 1918-1919, the mass of workers and soldiers initially put their faith in the social democrats, not the Spartakusbund of Rosa Luxemburg and Karl Liebknecht. In the Portuguese Revolution of 1974-1975, the mass of workers looked either to the reformist Communist Party or to the even more reformist Socialist Party, and only a small minority to the revolutionary left.

The revolutionary left

James Petras has claimed in a widely circulated article that the revolutionary left was nowhere to be seen in the events of 19-20 December. [72] Fortunately, the claim is by no means wholly true. Some sections of the revolutionary left were present on the day [73] and have thrown themselves into attempting to build and influence the popular committees since. [74] What is true, however, is that the Argentinian far left is small in size, split into several different groups, and possesses nothing like the standing to influence a mass spontaneous uprising.

The left was not always so weak. Although the repression of the junta was disproportionately directed against the far left, killing a large number of its activists and forcing many more into exile, it was still a substantial force in the late 1980s. The Trotskyist organisation the MAS (formed in 1983 by a merger of the old PST with various other socialist groups) then had several thousand members, and another group, the Partido Obrero, seems to have been quite sizeable. But the years of defeat for the workers’ movement began to exact a toll by the end of the decade. The overall trajectory was not that different to that of much of the European left. Pablo Pozzi tells:

Though [the organised left] grew significantly between 1983 and 1986, it was hurt by the 1976-1983 repression, the collapse of the Soviet Union and the overall international situation. The disappearance without a whimper of the USSR demoralised many activists, including those who had traditionally criticised Stalinism ... In addition, to many people it implied that socialism was no longer on the agenda, if it had ever been. This opened up a lot of possibilist notions, including several social democratic variants. The road to socialism suddenly became not revolution but rather an evolution of ever-increasing democratic spaces to be acquired through electoral participation ...

After 1983 most leftist organisations launched themselves into the electoral struggle hoping to elect a few legislators. Many leftist groups spent their scarce resources and their activists in elections, pulling them away from mass work. A lot of energy was spent in forming electoral alliances and efforts were made to become acceptable to the press and the mainstream voter ... MAS succeeded in electing a national Congressman, a local councillor and a provincial deputy, but the cost was high ... The notion emerged within the party that participation in mass struggles imperilled further electoral advances, for it alienated the middle classes. [75]

MAS eventually split into several fragments, with the group that kept the name turning back towards a revolutionary perspective which talks of ‘socialism or barbarism’ and ‘socialism from below’. Alongside it are the Partido Obrero (Workers Party) – also quite large in the late 1980s. There also exists another fragment of the old MAS, the Movement for Socialism (MST), the smaller and more recently formed Partido do los Trabajadores por el Socialismo (Party of Workers for Socialism), and the supposedly Maoist Partido Comunista Revolucionario (influential in the Corriente Clasista y Combativa). These all retain some worker militants from the 1970s and 1980s, but between them they have nothing like the impact of the far left of a dozen years ago.

The Communist Party likewise suffered both a loss of influence and internal fragmentation. In 1989 it had formed an electoral alliance with MAS. In 1993, however, it looked to Peronist politicians who had been cast aside by Menem’s government. But the key figure in this alliance then drove it out and became part of the Frepaso coalition, joining the de la Rua government that was swept away on 19-20 December. [76]

Finally, the atmosphere of those years encouraged attempts to find some sort of reformist alternative to the crisis. The notion that neo-liberalism was simply a crazy policy imposed on ‘the whole country’ by foreign capital and its local stooge Cavallo, rather than reflecting the needs of Argentinian capital to climb onto the world stage, led the CTA, for instance, to hunt for a section of local capitalism which would join it in a programme of national expansion based upon boosting workers’ incomes and the market for consumer goods. [77]

The early and mid-1990s was a very difficult period for those sections of the left that survived, just as the years in Britain after the defeat of the miners’ strike (1984-1985) and the print workers’ fight (1986-1987) were extremely difficult. And they inevitably created two apparently contradictory but in reality complementary tendencies on the left.

The first tendency was to accommodation, if not with neo-liberalism (which did occur in some cases), at least with various reformist schemes – encouraged in Argentina by the old left habit of seeing the main enemy as being foreign capital, against which it was necessary to ally with sections of local capital. For activists who managed to maintain their jobs in organised workplaces, there was the parallel pressure to accommodate to the methods of the union bureaucracy, substituting verbal opposition to its politics for the very difficult task of mobilising struggle in face of resistance from it.

The second tendency was sectarianism. Rarely able to move real forces in opposition to the attacks of the system, it was very tempting for left groups try to substitute programmatic formulas for this – and then to argue vehemently with each other about the details of the formulas. Demands like that for a ‘constituent assembly’ were endowed with magical qualities they have never possessed (even in those historic situations when they were appropriate). Along with this often went a tendency to use verbal abuse against reformist currents and the trade union bureaucracy rather than methods of argument that could win over those workers who still looked to them. This must be an impediment to providing the sort of practical leadership that the movement needs today.

Yet the left should have the possibility of having an impact on events. Provincial elections took place in October 2001. Their most notable feature was the disaffection with the mainstream political parties shown by the huge level of abstention and spoiled votes – nearly 10 million – in a country where voting is supposedly compulsory. But some of the disaffected showed a willingness to look to left wing alternatives. The combined national vote of the various left parties and groups was over 1 million – of which 500,000 went to the joint Communist Party/Socialist Workers Movement (MST) list, 250,000 to the joint Workers Party (PO)/Movement Towards Socialism (MAS) list, and 100,000 to the Party of Workers for Socialism (PTS). In Buenos Aires city the left got a hefty 27 percent of the vote, and it also did well in cities like Córdoba and Salta.

The vote for the left seems mainly to have been a protest vote, rather than a sign of deep agreement with its positions. It showed there is potential for the left to be an influence, that there are people prepared to look to socialist politics as an alternative to those of the rival bourgeois parties, but no more than that. The question since 19-20 December is whether the revolutionary left can build on that potential.

The crisis for the ruling class

In a famous passage Lenin argued that for a revolutionary situation to exist it is not good enough for the exploited class to find conditions insufferable. The ruling class also has to reach the conclusion that things cannot continue in the old way. This creates deep, paralysing splits within it, throwing the whole of society into turmoil, and spurring the exploited classes to express their own anger.

This was already clear in the crisis of March last year, which saw the ousting of Lopéz Murphy and his replacement by Cavallo. When Lopéz Murphy announced his plan for savage cuts in the education system he was cheered to the rafters by a gathering of 300 top business people. But at the same time the UIA (roughly equivalent to the Institute of Directors in Britain) criticised the scheme. The return of Cavallo to the economics ministry briefly quelled such disagreements, but they had returned in a stronger form by the summer. The issue in dispute within the capitalist class was whether the way out of the crisis lay in devaluing the peso (so, hopefully cutting imports and raising exports) or replacing it once and for all by the US dollar (so making foreign investors more ‘confident’ that they could safely lend to Argentina).

Behind this argument over monetary policy lay a clash of real material interests. Dollarisation represented a way of protecting wealth from the Argentinian crisis for those financial sectors that had reaped hard cash out of the previous ten years, and for the very rich. It translated it into a form that could be moved anywhere in the world in search of more profits. By contrast, those who owned productive industries – including even foreign firms that had bought up those industries with privatisation – wanted to escape from being tied to the dollar. Neo-liberalism had suited them in the early 1990s when it led to smaller firms being driven out of business and a concentration of assets in their own hands. The destruction of certain ‘uncompetitive’ industries was, for them, a price worth paying for creating a lean Argentinian capitalism with much reduced labour costs. But the ability of the remaining industries to sell their goods in the face of foreign competition was undermined by the high value of the peso so long as it was linked one for one to the dollar. Devaluation, they believed, would reduce the prices for which they could sell goods abroad, while staunching the flow of imports and raising the prices they could charge at home. So manufacturing firms and the big agribusinesses opposed dollarisation and pressed for devaluation.

The crisis of ruling class politics became acute when the IMF refused to release more funds in December and the banking system threatened to grind to a halt. The two mainstream political parties, the Radicals and the Peronists, were increasingly fragmented internally, with the various local Peronist political bosses intent on pursuing measures to bolster their individual positions with little concern for the interests of the ruling class as a whole. No political figure was powerful enough to impose either dollarisation or devaluation. There was drift without any policy except more budget cuts until the shortage of dollars compelled the government to freeze bank accounts with the corralito – and seal its own fate.

The eruption of the masses onto the political scene increased the level of fragmentation. Rival politicians had to respond not just to the prompting of the warring sections of the ruling class, but also to the pressure from below. They knew that saying the wrong thing and upsetting the crowds could ruin political reputations – a popular gesture, on the other hand, might set them off on amazing careers. In this way the tumult in the streets also became tumult in the Congress and the presidential Casa Rosada (’Pink House’). Rodriguez Saá was appointed president by the political establishment, only to be overthrown just over a week later after further mass insurgency on the streets and political plotting by his rivals among the Peronist bosses. Duhalde, one of the chief plotters, took his place, but seemed unable to produce a coherent programme. He announced the devaluation of the currency and a moratorium (temporary halt) to payments on the foreign debt, but wasted a month elaborating what this meant for the billions of pesos deposited in and owed to the banks. Meanwhile the corralito remained in effect, and with it the bitterness of the middle classes. The government denounced ‘the monstrous evasion of the tax system, characterised by the punishment of consumers and the lowest level of taxation on profits in the world’ and sent the police in to inspect the books of banks suspected of moving funds abroad. [78] But it also hastened to assure the foreign owners of privatised concerns that it was not going to damage their interests and initiated discussions with the IMF on debt payments.

Financial Times columnist Martin Wolf summed up the dismay among many capitalist interests at the disarray within the government. ‘Argentina’s president’ had ‘turned calamity into something worse’ by his efforts at a ‘populist’ policy aimed at pleasing everyone. [79] Wolf did not say what else Duhalde could do if he was to save his political head.

A week later the previously warring sections of big Argentinian capitalism came together to put pressure on Duhalde to drop the ‘populism’. A headline in Página 12 read The Holy Alliance Of The 90s Is Reborn. The story underneath told of a coming together of ‘the association of Argentinian banks and the most powerful business interests’ now that the issue of devaluation had been settled: ‘Since devaluation, the banks and the great national economic groups like Pérez Companc, Techint, Macri, Fortabat and Bulgheroni have identified common interests and rearmed the society formed in the 1990s. The fight of the Union Industrial and the men of construction and the agrarian interests against the profiteers of the last decade has come to its end’. [80]

Even this did not spell the end of political infighting among those who had presided over neo-liberalisation. The very day this report appeared, the Supreme Court intervened to declare the corralito illegal. The court is dominated by people handpicked by Menem during his presidency, and is widely seen as linked, via him, to powerful and dubious business interests. The move was clearly a manoeuvre aimed at destabilising the Duhalde government. As huge crowds once again swarmed through the centre of Buenos Aires, Duhalde announced a new scheme for slowly unfreezing bank accounts and parliamentarians talked of impeaching the Supreme Court. The Financial Times correspondent believed this could ‘set the stage for the most serious constitutional crisis since the country returned to democracy in 1983’. [81] In the days that followed ‘rumours about a military or civil-military coup began to circulate, so weakening the government even further’. [82]

The government’s measures for dealing with the banking crisis were exacerbating social tensions. It tried to give the measures a populist appeal by saying they would centre around unfreezing bank accounts sufficiently for people to withdraw amounts each month equal to their wages or pensions. But it rapidly became clear more was involved.

At a time when the dollar was worth about 1.8 pesos on the exchanges, the government had agreed to restrict the amount that needed to be paid back to the banks by large debtors (those with more than $100,000 dollars of debt) to one peso for each dollar of debt, and to compensate the banks for the difference. In effect, it was ‘statifying’ the debt of the giant financial and industrial concerns. [83] At the same time, those with savings in the banks were only to get 1.4 pesos for each dollar saved. In practice, small savers were going to join with the state in subsidising large debtors. This would, for instance, halve the real level of the $350 million debt of the firm Pérez Companc, and at the same time increase the indebtedness of the state by an estimated $7 billion. [84]

The deal was much more favourable to big capital than that originally envisaged by Duhalde’s economy minister Remes Lenicov. But the ‘Economic and Bank groups’ with the ‘indirect help of the Supreme Court, which brought the Duhalde government to the verge of collapse’, persuaded the government to introduce the measures in their final form. [85] It was not only small savers who were hit. In fact in the next few days prices began to rise right across the board, with medicines (both home produced and imported) shooting up by 35 percent overnight.

Finally, the government was also seeking further agreement with the International Monetary Fund, and promising further cuts in public spending to achieve it. This can only push the economy further into recession at a time of rising prices.

Not surprisingly, the days after the announcement of these measures have seen no decrease in social tensions. Employees who still have jobs will be forced to struggle to maintain the real value of their earnings in the face of rapid inflation and to defend their jobs as the recession gets deeper. The pressures driving the unemployed into abject poverty will get greater. And there will be great resentment among small savers at having to subsidise the big capitalists. A report from Buenos Aires tells:

Each day the movement of the popular assemblies is gaining more force. The open meetings, the neighbourhood assemblies and the multi-sector gatherings have spread to almost all the provincial capitals and are beginning to take in, through the actions of the piqueteros, wide zones of the Buenos Aires conurbation (above all in the areas adjoining the capital, like Matanza, Valentin Alsina and Tres de Febrero, which have been bastions of the Duhaldist apparatus), which, as you can imagine, is worrying the Justicialist Party machine in Buenos Aires. On the last demonstration you could see the tendency for the popular assemblies to converge with the movement of the piqueteros, chanting the same slogans (’Piquete y cacerola! The struggle is the same!’ ‘Work for everyone’, ‘Get rid of them all, don’t let a single one remain’) and marching together to the Plaza de Mayo.

Where is Argentina going?

The economic and political instability of Argentina make it impossible to predict what will happen next. The government desperately wants to deflate the cacerolazo protests, by detaching sections of the middle class from the movements of the poor and the unemployed. It also desperately hopes that the bureaucracies of the two CGTs will manage to prevent whole workforces of employed workers being drawn into these movements. That is the rationale behind its various ‘populist’ promises. They are meant to create a situation in which the forces of the state can be let loose against the movement on the streets.

But it cannot fulfil these promises without upsetting the powerful financial and industrial interests. Argentinian capitalism is simply not in a situation where the government can satisfy the immediate demands of the mass of the middle classes, let alone the employed workers, without upsetting the most powerful capitalist groupings. And these groups will use every means in their power to exert pressure on it. Major sections already long for the ability to use the army as well as the police to ‘restore’ order across the length and breadth of the country.

They are a long way from being able to do such things at the moment. They still need a ‘populist’ government of the Duhalde sort, even if they moan about that government and may opt for some other figure at its head. But they will take advantage of any success Duhalde has in cooling down the mass movement to push ahead with more ambitious and more repressive schemes. They can be expected, for example, to provide encouragement to some of the right wing nationalist groups that have flourished in the past – not necessarily to bring them to power, but to use them as a force to push the political life of the country in safer, more right wing directions. They will be hoping to feed off the very bitterness created by the economic crisis. The level of unemployment, the bankruptcy of small businesses, and the atomisation and isolation produced by poverty can all open people up to lure of right wing ideas. The 1990s in Argentina did not just see the rise of the piqueteros – it also saw agitation against immigrants from Chile, Paraguay and Bolivia, and a swing of disaffected voters towards a far right party in some elections. As Pablo Pozzi wrote two years ago, ‘Racism has increased significantly. Jokes, comments and discrimination are often directed at the recent immigrants from neighbouring countries and from South Korea. This racism is also expressed in the notions that chilotes (Chileans) and boliguayos (Bolivians and Paraguayans) are lazy, backward, thieving people who have come to steal jobs from Argentinians ... Recent research demonstrates that ...racism ...has increased over the past decade’. [86] The upsurge of struggle has, for the moment, drowned the voices of those racist and nationalist demagogues who would try to gain politically from such sentiments. Significantly, the resolutions passed by the neighbourhood assemblies express solidarity with the immigrant groups. But there must be the danger of a renewed hearing for racists and right wing nationalists if the mass activity of the cacerolazos and the piqueteros does not succeed in dealing with the desperate poverty of half the country’s population.

For this reason, it is not good enough for the left in Argentina simply to extol what has happened in the last six weeks. The lesson of the great world crisis of the 1930s is that such conditions can open the door to revolutionary hope (Spain in 1931 and 1936, France in 1934-1936) but also counter-revolutionary despair (Germany in 1933). The left has to try to carry the movement forward so that the hope prevails over the despair.

Two things are key here. There is the generalisation of the political and social demands already emerging from the popular assemblies – worksharing between the employed and unemployed without loss of pay, welfare benefits sufficient to lift people out of poverty, nationalisation of the banks, renationalisation of the privatised companies, seizure of meat and grain from the agro-commercial firms and supermarket chains to feed people.

But alongside this there have to be attempts to spread the mobilisation and the organisation so as to tap the forces capable of implementing such demands. A programme of action is no good to a hungry person so long as it is simply printed on paper – which is why scholastic disputes over the exact wording of such programmes is a diversion from the struggle. What is needed is the power to begin to implement such a programme. In Argentina, that means involving employed workers who are still under the influence of the trade union bureaucracy. Such workers are fewer in number than before the economic crisis. But there are still millions of them (1,610,000 in greater Buenos Aires, 210,000 in greater Córdoba, 110,000 in greater Rosario at the end of last year [87]) and their labour is still essential to the day to day functioning of Argentinian capitalism. Like workers elsewhere in the world, mass unemployment has created reluctance among many of them towards entering into any struggle they fear may not be won. The trade union bureaucracy has been playing on this fear, telling them that their only hope is Duhalde. But they have lived through an experience in the last six weeks unlike that anywhere else. They have seen how mass action can overthrow governments – and many of them have been involved in the mass actions of the last few weeks as individuals, even if not as organised workplace contingents. What is more, some at least have been involved in very bitter workplace struggles in these weeks to defend their jobs and have formed links with the piqueteros, and others cannot avoid having to fight to defend their living standards against inflation. This opens up the prospect of them being won to the far reaching demands that only they have the power to implement – demands whose implementation would carry the Argentinian uprising in a clear anti-capitalist direction.

The Argentinian left, as we have seen, is weak. But situations like that in Argentina transform the consciousness of the people by the thousand. Reading the Argentinian papers and watching the Argentinian news broadcasts on the internet remind me of the atmosphere of France in 1968 or Portugal in 1975, of radicalisation on a mass scale, but against the background of a much greater social crisis. The left in Argentina has to throw all of its relatively weak forces into action, in an effort to create a revolutionary pole of attraction in the midst of the explosive ups and downs of a whole society in economic, social and political crisis.

Meanwhile, for the left elsewhere there is a very simple lesson to be taken seriously. In the midst of a world system undergoing repeated, convulsive crisis, all that is solid can melt into air. A stable political system in which the revolutionary left seems marginalised can suddenly be twisted apart, producing great upsurges from below. The old left that became demoralised in much of the world in the late 1980s and early 1990s and the new left born since Seattle can suddenly be confronted with potentially revolutionary situations.

Argentina is not an exception. It is not some remote and foreign place. The crisis is not a result simply of the politicians adopting ‘mistaken’ policies. Nor is it a matter of them simply succumbing to privatisation and neo-liberalism because of their all too evident personal corruption or the all too obvious foreign pressures. Argentinian capitalism is a weak capitalism which has found no way to cope with the impact of successive world crises except to attack the conditions its workers and lower middle classes have taken for granted in the past. And that is a problem that besets many other capitalisms, including some we usually think of as strong. Argentina is not the only place in which we are going to feel the desperate need for a revolutionary party with serious roots in the working class.

10. For full accounts of these events, see J.P. Brennan, The Labor Wars in Córdoba 1955-1976 (Harvard 1994), and chapter 9 of D. James, op. cit.

11. References to Argentina as a ‘semi-colony’ are widespread on the Argentinian left. In some cases the phrase is meant simply as a synonym for ‘impoverished’. In other cases it signifies explicitly that the local bourgeoisie lack political sovereignty because it is economically weak and therefore forced into a subordinate position in its economic relations with capitalism in richer and more powerful countries. This is to make a fundamental theoretical error. A colony lacks political independence. Once it achieves political independence – i.e. to be no longer dominated militarily by some other power – it ceases to be a colony. The fact that it cannot attain some mythical economic independence from the world system is neither here nor there.

This was the point Lenin made repeatedly in his polemics against those, like Rosa Luxemburg and Nikolai Bukharin, who opposed the demand for national self determination in the years before the Russian Revolution. They claimed that there could not be economic independence and so there could not be political independence either. He was insistent one was different to the other. The term ‘semi-colonial’ can only be correctly ascribed to countries where direct foreign military interference makes nonsense of the pretence of political independence – for instance, countries like El Salvador, Nicaragua and Panama through much of the 20th century. It cannot be applied to a country with a ruling class which runs its own state, exercising an internal monopoly of armed power, and then does deals with the great imperialist powers in which it is a junior partner. Not to see this has led those influenced by Stalinism repeatedly to look for alliances in pursuit of ‘national independence’ with a local bourgeoisie that already exercises state power – this has been prevalent, for instance, in India, where it has led the Communist parties to back the military adventures by the Indian state. It can also lead even those from the Trotskyist tradition to come out with absurd formulations like speaking of the ‘bourgeoisie in backward countries’ (including Argentina) as ‘a semi-oppressed class’, of Argentina as ‘a semi-colonial nation lacking sovereignty’ and as only having achieved ‘pseudo-industrialisation’ in the period from the 1930s to the 1970s. (J. Sanmartino of the Argentinian PTS, The Impotence of Progressivism, International Strategy, no 1 (May 2001), pp.36, p.33). One wonders what a pseudo car plant looks like! More seriously, it opens the door to trying to make political alliances with local capitalism. After all, in a real colonial situation, in the face of the occupying army of an imperialist power, we would have to provide unconditional but critical support to any struggle of the bourgeoisie to drive the occupying forces out (as we do, for instance, in the case of Palestine today).

Lenin had no doubt that Argentina was ‘politically independent’, even though economically ‘dependent’ on Britain in the years running up the First World War. In Imperialism, the Highest Stage of Capitalism, he states, ‘Another form of dependence’ to that of the ‘semi-colony ... is provided by Argentina’, where ‘the British finance capital ... acquires ... strong connections ... with the Argentinian bourgeoisie, with the circles that that control all of that country’s economic and political life’ (V.I. Lenin, Collected Works, vol.22 (Moscow 1964)). For him it matters that ‘the circles’ in control of the state are Argentinian and not British. It means there is no struggle to be waged by the bourgeoisie and those under its influence for the political right to self determination. Elsewhere he emphasised the point, explicitly contrasting the situation in Argentina with that in other countries which lack political independence. In these the conditions existed for a struggle for sections of the bourgeoisie and petty bourgeoisie to clash with the imperialist powers over the demand for political independence. He was insistent, however, that political independence was not the same as economic independence, which, he held, was not possible for any capitalist country involved in a world capitalist system dominated by the great firms of the imperialist powers. See The Nascent Trends of Imperialist Economism, A Reply to P. Kievsky (Y. Pyatakov), and A Caricature of Marxism and Imperialist Economism, in V.I. Lenin, Collected Works, vol.23 (Moscow 1964), pp.13-76. The explicit reference to Argentina is on page 44. Of course, in countries where firms from the imperialist powers own banks, industries, etc. there is a struggle to wage against them as well as against the local capitalists. And workers have to be prepared to find the imperialist powers assisting the local bourgeoisie in crushing resistance to anti-capitalist struggles. There is an anti-imperialist dimension to workers’ struggles, but it is not at all the same as that in a colony or semi-colony, where the forces of imperialism fully or partly exercise direct political power.

33. The figures given by the US Agency for International Development, Washington DC, 1996, show a rise of about 4 percent – although this figure may be misleading since we know that in this period there was growth of low paid unregistered employment in the black economy.

34. See figure 5 in P, Sanguinetti and J, Pantano, Changes in Production and Employment Structure and Relative Wages in Argentina and Uruguay, World Bank Sponsored Paper (August 2001).

58. The attempts to do so in La Verdad Obrera (8 January 2002) and Prensa Obrera (28 December 2001) do not hold water. The fact that there were previous struggles does not mean there was no spontaneous movement of vast numbers of new people into action, constituting a qualitative change form what had gone before.

59. The point is well made in M. Romano, Four General Strikes in 15 Months, in the PTS journal, International Strategy, no.1 (May 2001), p.31.